As your browser does not support javascript you won't be able to use all the features of the website. We strongly recommend you to enable the javascript in your old browser's settings or download a new one.

Can Baidu (BIDU) Spring a Surprise this Earnings Season?

Baidu, Inc. BIDU is set to report first quarter 2016 results on Apr 28. Last quarter, the company posted a huge 1,179.07% positive earnings surprise. Let’s see how things are shaping up for this announcement.

Baidu’s increasing presence in the online video market is likely to improve its competitive position. However, higher promotional expenses, heavy spending on video and O2O, and increasing competition on its own search platform from the likes of Qihoo 360 Technology and Sohu’s Sogou search engine remain concerns.

Some of the current buoyancy surrounding the shares is related to the company’s strong dominance in the mobile search market and its consistent product development efforts. Moreover, Baidu continues to gain market share. We believe that the company has significant growth potential in the mobile market over the long term.

For the first quarter of 2016, Baidu expects total revenue in the range of RMB15.410 billion (or $2.379 billion) to RMB15.970 billion (or $2.465 billion), representing year-over-year increase of 21.1%–25.5%. Analysts polled by Zacks expect revenues of $2.429 billion.

Earnings Whispers

Our proven model does not conclusively show that Baidu will beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 78 cents. Therefore, its Earnings ESP is 0.00%.